According to a new research spanning 2022, 52 per cent of advice clients requested that environmental issues be considered for their portfolios.
To coincide with the publication of its new white paper, A little goes a long way: how to reduce your carbon footprint, Australian Ethical revealed on Wednesday that Australians seeking financial advice are increasingly questioning their advisers about renewable energy, climate change, and reducing their carbon emissions.
“More and more Australians want their capital invested in line with their personal values, and many of them are looking to their advisers on how to do this,” said Maria Loyez, Australian Ethical chief customer officer.
The white paper, informed by new research from the UTS Business School and Lonergan Research, revealed that Australians are often overlooking the role their superannuation savings play in driving the low-carbon transition.
This, Australian Ethical explained, could be linked to their skewed perception of superannuation. Namely, the fund revealed that only two in five Australians identify as an investor, despite 86 per cent having their retirement savings invested in a superannuation fund.
As such, Australian Ethical found that placing $50,000 worth of super or investments in a fund with a low carbon footprint was ranked third on a list of actions clients can take to reduce their footprint, behind installing solar panels and switching to a renewable energy plan.
Moreover, the findings suggested that as many as 19 per cent of individuals haven’t switched super funds due to concerns about greenwashing, with this sentiment prevalent among high-value investors. Meanwhile, one in four said they do not understand the impact super funds and investments have on climate change.
“Many people are not sure about the amount of CO2e emissions generated through various everyday actions and are unaware that investing their superannuation in an ethical fund can have a significant impact by directing money away from companies that are contributing to climate change,” Ms Loyez explained.
“When enough people invest responsibly, this collective action can act as a powerful signalling mechanism for change in the industry whether that’s through public pressure or shrinking access to capital and insurance,” she continued.
Ultimately, Australian Ethical found that Australians are underestimating the reduction needed. Namely, according to the fund’s research, Australians, on average, produce a staggering 15.4 tonnes of CO2e per person each year, which is among the highest in the world.
